We recently published a list of Jim Cramer Praised These 6 Companies’ Exceptional Management. In this article, we are going to take a look at where Brinker International, Inc. (NYSE:EAT) stands against other companies that Jim Cramer praised for their exceptional management.
On Thursday, Jim Cramer, host of Mad Money, pointed out that Wall Street often overlooks the importance of strong leadership in a company, and how a new CEO can significantly impact a company’s valuation, even in the face of broader macroeconomic challenges.
“When we value stocks in this environment, we tend to think of how they’ll fare in the world of rising long-term interest rates… how they perform under the new presidential regime… We care about the sector and how it’s behaving but how about the companies? How about the people who run them?”
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Cramer emphasized that too often, the conversation about the individuals running companies gets sidelined. While not every leadership change leads to success, he believes that in certain situations, the right CEO can make all the difference in driving a company’s growth. He urged viewers to consider how a great leader can transform an entire business, suggesting that investors might want to look beyond the usual sector battles and instead focus on companies with fresh, capable leadership.
He added that the ability of a skilled CEO to steer a company in the right direction is an often overlooked but powerful factor. He commented:
“The transcendence of the enterprise, thanks to the leadership of a great CEO, why not celebrate it? Hey, stop denigrating it at least… It may pay to think bigger instead of just being in the tech battleground out here every day.”
Cramer expressed his frustration with the constant debates surrounding the tech sector, stating that he finds the ongoing arguments tiresome. This, he explained, was part of the reason he wanted to shift the conversation and focus on companies led by new executives. “I’m tired of tech just sitting there and people arguing about it all the time. It’s getting boring to me,” he said.
“So here’s the bottom line: Not all publicly traded companies are hostages to forces beyond their control… Sometimes when you bring in a great new CEO… they can turn around the whole business giving the investors spectacular gains even when tech blinds us like mustard gas.”
Our Methodology
For this article, we compiled a list of 6 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 30. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Holders: 41
Brinker International, Inc. (NYSE:EAT) owns, operates, and franchises casual dining restaurants, primarily under two brands: Chili’s Grill & Bar and Maggiano’s Little Italy. Here’s what Cramer said about the company:
“For instance, I want to start with someone we had on the show last night. He’s making more money for you than any company I’m talking about. I’m talking about Kevin Hochman. He’s the CEO of Brinker. Hey, just because it’s small doesn’t mean you can’t make money, there’s no rule. You may know them as the parent of Chili’s… It’s a chain of 1200 casual dining restaurants in the U.S.… A few years ago, Hochman departed a high-level job at Yum Brands where he ran KFC in order to take the helm of Brinker…
I always liked the price point… But I never liked the stock, nothing special, marginal, meaningless, and then less than three years ago, Hochman came roaring in as CEO and it’s never been the same. He simplified the menu that’s too hard… He gave you a value meal dinner under 11 bucks, an inexpensive, terrific mixed drink with real good tequila, special management, and… by the way, and a delicious dinner for everybody… The result? The stock’s now up more than 340% in just the past year.”
Cramer noted that if the Brinker (NYSE:EAT) stock reaches $200, it could potentially become a “10-bagger,” considering it’s already trading at $182. He referenced legendary investor Peter Lynch, who famously emphasized that hitting a 10-bagger is the ultimate goal for any investor. The term “10-bagger” refers to investments in the stock market that have grown ten times in value, as well as those with the potential to experience tenfold growth.
Cramer mentioned that Lynch, known for managing the Magellan Fund and for writing the widely regarded business book One Up On Wall Street, has long promoted this idea. Cramer believes that Brinker (NYSE:EAT), under the leadership of CEO Hochman, has the potential to achieve such a return for investors.
Overall, EAT ranks 1st on our list of companies that Jim Cramer praised for their exceptional management. While we acknowledge the potential of EAT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
